Population Crash

China has had the largest population globally since at least 1950, when the UN began recording population data. In the forthcoming year, China is expected to relinquish its position as the world’s most populous country to India, as projected by the United Nations.

China’s low fertility and birth rate can largely be attributed to the One Child Policy, which was enforced for over three decades, from 1979 to 2015. This policy restricted most urban couples to having only one child, with some exceptions for rural families and certain ethnic minorities. While the One Child Policy was initially implemented to control population growth, it profoundly affected China’s demographics. Couples faced strong incentives to adhere to the policy, such as employment opportunities, access to education, and social benefits tied to having only one child.

China’s 2022 total fertility rate is estimated to be 1.18 children per woman – down substantially from earlier decades and significantly below the “replacement rate” of 2.1 children per woman. This is despite the relaxation of the country’s well-known one-child policy, which was introduced in 1980 but amended to allow two children beginning in 2016 and three children.

This resulted in a significant drop in the birth rate and an aging population, which presents various socio-economic challenges for China, including a potential labor shortage and increased elderly care demands. In recent years, China has relaxed its family planning policies to address these issues, allowing couples to have two children and removing birth restrictions entirely. However, reversing the demographic consequences of the One Child Policy remains a complex and ongoing challenge for the country.

In July 2022, the United Nations’ population data indicated a decrease in China’s population. It is expected to drop from its current high of 1.43 billion to approximately 1.3 billion by the middle of this century. This projection is associated with a significant decline in the fertility rate and an increase in life expectancy, which seems to offer an explanation.

Despite China’s shift from its well-known one-child policy in 2014 to a three-child policy in 2021, the country is currently experiencing its slowest population growth in decades.

In response to these population statistics, China’s National Health Commission reported that the total fertility rate had fallen to 1.3 in 2020, well below the critical threshold of 2.1 required to maintain population stability. Some reports even suggest that the present total fertility rate is as low as 1.16, which could have dire consequences for economic growth, healthcare, and the cost of living. One report even warned that China is on the brink of a severe demographic crisis.

The primary obstacles hindering the realization of these intentions were identified as economic challenges, a critical pain point, and the responsibilities associated with child care. The government must prioritize addressing these barriers to support its three-child policy effectively. Currently, the policy alone cannot sufficiently counteract the declining trend in fertility. This trend is an inevitable consequence of economic and social development, similar to what is observed in other countries, such as Taiwan and Hong Kong, with low total fertility rates (TFR).

Multiple initiatives will be needed to address this issue to create a more fertility-friendly environment. Some potential measures could include promoting arrangements for three-generation living and recognizing the crucial role of family support in raising children.

This carries significant economic and social consequences that pose both immediate and long-term challenges to the country. Economically, a declining birthrate can result in a shrinking workforce and increased pressure on pension and healthcare systems.

As the younger population diminishes, the burden on the working-age population to support the elderly grows, potentially leading to a strain on social welfare programmes. This can hinder economic growth and competitiveness on a global scale, as a smaller labor force may limit the capacity for innovation and productivity.

Additionally, a reduced number of young consumers can adversely impact various industries, including education, real estate, and the overall consumer market.

From a social perspective, a low fertility rate can result in profound demographic imbalances. A smaller cohort of young people relative to older people can lead to a shortage of caregivers and a potential decrease in family support systems.

As the traditional family structure evolves, there may be a greater reliance on government services to provide care for the elderly, increasing the social and financial burden on the state. Furthermore, gender imbalances may persist or worsen as families continue to prefer male children, contributing to an already skewed sex ratio. These demographic shifts can have far-reaching social implications, including strained healthcare systems, changes in intergenerational relationships, and shifts in societal norms and values as the population ages and family dynamics transform.

Addressing these challenges will require comprehensive policies supporting family planning, work-life balance, and social welfare programmes to ensure China’s more sustainable and balanced demographic future.